ASTANA CALLING

A bi-weekly online publication of the Ministry of Foreign Affairs of the Republic of Kazakhstan

Tuesday, January 5, 2010

Issue # 25

Kazakhstan Assumes OSCE Chairmanship, Will Lay Out Agenda Next Week

(The role and responsibilities of an OSCE Chairman-in-Office)

On January 1, 2010, Kazakhstan became the twentieth state chairing the Organization for Security and Cooperation in Europe since the establishment of the Chairman-in-Office position in 1991.

Kazakhstan’s Secretary of State – Minister of Foreign Affairs Kanat Saudabayev will be the Chairman-in-Office of the OSCE for the next twelve months. He will outline Kazakhstan’s priorities for the chairmanship in a speech to the OSCE Permanent Council in Vienna on January 14. The speech will be preceded by an unprecedented concert of Kazakh folk and world classical music the previous night at Hofburg Palace, the headquarters of the organization.

In accordance with the mandate, the Chairman coordinates the work of main governing bodies of the Organization – high-level meetings (summits), annual meetings of the Ministerial Council, weekly sessions of the Permanent Council, as well as subsidiary bodies. Having put forward the idea of convening a Summit of Heads of State in 2010 which was reflected in the documents of Athens Ministerial, Kazakhstan initiated the elaboration of conceptual and organizational issues of the Summit.

Among other major events of the OSCE in 2010, it is important to highlight the meetings of the Parliamentary Assembly, the Annual Security Review Conference, sessions of the Economic and Environmental Forum, the Human Dimension Implementation Meeting, High-Level Conference on Tolerance and Non-discrimination, Conference on Terrorism Prevention, Conference dedicated to the 20^th anniversary of the Copenhagen Document, etc.

For the year of its Chairmanship Kazakhstan has worked out a schedule of multilateral and bilateral consultations which covers all OSCE participating States. Thus, on a regular basis, Vienna and other capitals within the OSCE area will be hosting regular consultations with the European Union, the European Council, the CIS, NATO, CSTO and other international organizations. The importance of such approach for reconciling various positions on relevant issues of the agenda of the Organization, as well as the coordination of actions and avoidance of duplication in work has been demonstrated in practice. 

The key factor in ensuring effectiveness of work of the Organization is weekly work coordination within the framework of the Troika which includes Greece and Lithuania together with the Chairman-in-Office in the current year. more...

Government Believes Kazakhstan Economy Grew 0.5-1% in 2009

(Prime Minister Karim Massimov reported economic outcomes of the year)

Despite numerous hardships and the global economic downturn, Kazakhstan has managed to withstand the crisis and achieve 0.5 percent to one percent growth in 2009, Prime Minister Karim Massimov said at the press conference in Astana last week.

In his words, last year the inflation rate equaled to a mere 6.3%, which is the inflation’s lowest level over the last ten years in Kazakhstan.

A Road map program has been one of the greatest governmental achievements of 2009. It was designed to diminish the risks of growing unemployment due to the economic slowdown. Coordinated efforts of state organizations in realizing the program allowed creating 248,000 new jobs. The year-end level of unemployment is low and does not exceed 6.5 percent.

In 2010, the Kazakh government is determined to continue implementing the Road map, as its effectiveness clearly evidences the necessity to do so. Today, the total number of investment projects within the program has reached three thousand. Next year, 130,000 additional jobs will be created, 6.3 billion tenge being allocated to youth and social job placement. Up to 70,000 people living in Kazakhstan will have an opportunity to upgrade their skills and obtain a new profession, the Minister of Labor and Social Safety Gulshara Abdykhalikova stated.

Two years ago, the government introduced a “100 schools, 100 hospitals” special program. It deals with the shortage of facilities for children of pre-school and school age, along with insufficient number of medical and health care centers. As noted by the Ministers of Education and Health, 85 schools and 10 health care centers have been built in 2009. For these purposes 64.6 billion tenge were allocated last year, 46.7 billion of which were spent on constructing new hospitals. In general, over the last three years 217 health care facilities and 85 schools were built in line with the program.

A record breaking grain harvest is another significant accomplishment of the year. According to the State Statistics Agency, in 2009 alone the Kazakh farmers harvested 20.8 million tons of grain and pulse crops, including 81.9 percent of wheat. This year the country’s export potential amounts to 9-10 million tons of grain. more...

Tenge Devaluation Helped Economy, External Debt Down, Reserves Up

(Kazakhstan’s National Bank announced its assessment of results of 2009)

Kazakhstan’s National Bank summed up the results of 2009 in a large article published on New Year’s Eve by Kazakhstankaya Pravda, a leading national daily, saying the year was tough for the economy, but good overall.

Out of many of last year’s events, the one that was the talk of the town was the devaluation of the national currency, Kazakh tenge, by 25 percent back in February 2009.

Deputy Chairman of the National Bank Daniyar Akishev believes the step had a very positive impact on the overall development of economy.

“The devaluation of the tenge has led to increasing the competitiveness of Kazakh commodities by cutting their costs, improved the nation’s balance of payments, and reduced the rate of spending of foreign reserves,” Akishev stated.

According to earlier statements by the National Bank, the exchange rate of tenge should not fluctuate strongly within the next several weeks.

“Until February 5 [the anniversary of devaluation], the rate will not change: 150 tenge, plus or minus 5 tenge [per one dollar],” Chairman of the National Bank Grigory Marchenko said last week. After the designated date, borders of the exchange corridor expand in line with global developments.

In 2009, the government embarked on a series of bold anti-crisis measures.

“To stabilize the financial system, the state allocated 476 billion tenge. The current situation in financial markets proves the correctness of those measures. Currently, we witness stabilization of situation on the financial markets. Thus, in terms of narrowing the sources of funding, banks continued to lend money to the economy, and for January - November 2009 loans increased by 4.9% and reached 7.8 trillion tenge,” Akishev reminded.

“The National Bank carried out additional capitalization of the Kazakhstan Fund of Insuring Deposits. This measure has already proved its efficiency: the amount of deposits for the ten months of past year rose by 20 percent and reached 6.5 trillion tenge,” Akishev said. The program also contributed to a significant fall in inflation. The consumer price index did not exceed seven percent, while it reached almost 10 percent in 2008. more...

Samruk Kazyna Contributes to Stabilizing Banks and Real Estate Market

(National Welfare Fund sums up its activities in 2009)

Kairat Kelimbetov, Chairman of the Samruk Kazyna JSC, Kazakhstan’s National Welfare Fund, believes the Fund’s most important accomplishments last year were the “revitalization” of the banking sector and measures to stabilize the property market.

Last week, Kelimbetov reported that 480 billion tenge (KZT 150 = 1 USD) were allocated for the Kazakh banking sector in the past year. The bulk of the money went to the capitalization of the country’s four largest banks. In the cases of Halyk Bank and Kazkommertzbank the state became a significant minority holder as the pair managed to repay their debts without further support from the taxpayers. Assistance was provided for restructuring the debts of BTA Bank and Alliance Bank, which came under direct control of the Samruk Kazyna.

“Public confidence in the banking sector returns, we can see a gradual increase in the amount of deposits,” Kelimbetov said.

The National Welfare Fund also purchased problem-ridden housing objects from troubled private investors, who were hit by the credit crunch and became unable to complete their projects. All real estate purchased by Samruk Kazyna JSC under appropriate programs will be subsequently sold at fixed prices, with the special emphasis on empowering socially vulnerable categories of citizens to obtain decent housing.

“As a result, by 2011 we are going to build 35,000 new apartments for the people in Kazakhstan,” Kelimbetov promised.

He also outlined projects to be implemented in the nearest future.

“In 2010, we plan to implement projects such as the construction of the plant “Caustic” in the Pavlodar oblast, the completion of the Moinak hydroelectric power station and the Taraz Metallurgical Ferroalloy Plant, the reconstruction of the Shymbulak ski resort next to Almaty, the expansion of Aktau seaport, and the launch of assembling electric locomotives in Akmola oblast,” he said.

Kelimbetov noted the emphasis should be on diversification of existing facilities. Last year, the optimization of state companies was carried out, enabling the state to save 220 billion tenge (KZT 150 = 1 USD). more...

New Market of 170 Million Opens as Customs Union Launched on January 1

(Cooperation within Union promises up to 20 percent of Kazakh GDP growth)

Since January 1, 2010, Kazakhstan, Belarus, and Russia officially live within the Customs Union as three nations introduced the same customs tariff at their external frontiers.

This means that all movement of goods and services within the Union’s territory will proceed without paying tariff charges. This thus creates an open market of 170 million potential customers for a company investing in one of these three countries. Russia and Belarus have already cancelled customs at their borders, and Kazakhstan is scheduled to join them on July 1.

More light on issues related to Kazakhstan joining the Customs Union was shed last week by First Deputy Prime Minister Omirzak Shokeyev. At a special meeting with journalists he stated that the new arrangement may allow Kazakhstan to increase its GDP by 20 percent within the next few years.

“Now our goal is to ensure FDI and overall investment is channeled to non-primary sectors of the economy where the majority of our citizens work. This concerns the chemical industry, petrochemical industry, machine building, textile industry, food industry, and agro-industrial complex. To do this, we need a broader consumer market,” Shokeyev stressed.

Experts claim that the removal of customs trade barriers between the three countries can add up to US$ 400 billion to the three nation’s GDP, of which US$ 200 billion would be Kazakhstan’s share, which means a growth of some 20 percent by 2015.

The Customs Union is expected to encourage multinational companies to establish businesses on the territory of one of the three countries. In particular, according to Kazakhstan’s Ministry of Industry and Trade, manufacturers of agricultural machinery from Germany and the United States are planning to start production in Kazakhstan, which would also increase their access to the Russian and Belarusian markets.

The abolition of borders between Belarus, Kazakhstan and Russia will reduce transportation costs due to the lack of control inside the union. Customs payments are going to be cancelled. All this will reduce the final price of the product which can advantageous for the consumers. more...

Kazakhstan Joins World Tennis Elite at Hopman Cup 2010

(Maria Shvedova, Andrey Golubev in unofficial world cup for mixed teams)

This year for the first time Kazakhstan’s tennis players participate in the Hyundai Hopman Cup, the only international competition in tennis featuring mixed teams and unofficial world cup for mixed teams.

The country’s highest ranked players Yaroslava Shvedova (No. 51 in the female ATP ranking) and Andrey Golubev (No. 133 in the male ATP ranking) fought through Thailand, India, Korea, China and eventually Taiwan to book a spot in the tournament’s final. Kazakhstan becomes the third nation to play in Perth via the Asian Hopman Cup after host-nation India won the first tournament in 2007, and then Taiwan qualified in 2008 winning through the event hosted in Bangkok, Thailand.

The Hopman Cup is an annual international team tennis tournament held in Perth, Western Australia, which plays mixed teams on a country by country basis. Eight nations are selected annually to compete in the Hopman Cup. This year the cup is being played between national teams of Russia, Australia, Spain, USA, UK, Germany, Romania and Kazakhstan. The teams are divided into two groups, in which teams play each other, and the top team in a group goes to the final.

On their first day at Hopman Cup 2010, Team Kazakhstan lost in a dramatic game to the British national team by an aggregate score of 1-2. Yaroslava Shvedova came from behind Laura Robson to beat the British teenager in three sets.

“I came on the court to play and show my best tennis even if I was sick. I was trying hard and after the first set I had my nose bleed and was waiting five minutes for it to stop. Then I came back on the court and started to play,” Shvedova commented later.

However, in the following game Andy Murray, world’s No. 4 (formerly number two in ATP Ranking) and US Open finalist in 2008, beat Andrey Golubev in two sets. The last match between mixed teams saw the Brits overcoming in three sets with an entertaining finish on 10-12 in the last one.

This week, the Kazakhstan team at the cup will also meet teams of Russia (on Wednesday) and Germany (on Friday) and they still have an opportunity to break through to the final.

Expanding on the background of tennis in the country, one should note the state in Kazakhstan has paid significant attention to the development of both amateur and professional sports in the country. Tennis is no exception, as President Nazarbayev has been often seen practicing the game in his spare time. In 2008, the nation adopted a five year program for the development of tennis, which has already led to the construction of national tennis centers in Astana and Almaty. Another one is going to be built soon in Shymkent, a large city of half a million residents in southern Kazakhstan. more...

Country of Contrasts, or Why Kazakhstan Stays in Your Heart

(Former US Ambassador Describes His Kazakh Experience in European Journal)

In a recent article for Bulgaria’s Europe 2001 magazine, John Ordway, former U.S. ambassador to Kazakhstan, shared his reminiscences and impressions of a country where he spent four years.

Ambassador John Malcolm Ordway, born in California, is a retired American diplomat. He has served as the United States Ambassador to Armenia from November 2001 to August 2004 and earlier as the Charge d’Affaires in Vienna. Later, he became the United States Ambassador to Kazakhstan, where he worked since September 2004 till 2008. His last appointment was in Sofia, Bulgaria, where he served as the interim US Charge d’Affaires in 2009.

Ordway graduated from Stanford University in 1972 and the University of California’s Hastings College of Law in 1975. He speaks Russian, French, Italian, Czech and Armenian.

Below are excerpts from John Ordway’s article. The full text is available at www.mfa.kz

“Every few days I see something in the newspapers about Kazakhstan. Perhaps it’s datelined “Astana, the new capital of Kazakhstan.” Or sometimes it’s from “Almaty, the former capital of Kazakhstan.” Maybe the article is about the country’s vast oil fields, or its upcoming OSCE chairmanship. It might mention human rights, or ethnic diversity, or religious tolerance. Regardless of subject or dateline, for me any news of Kazakhstan brings back a rush of memories and experiences that will always remain sharp and clear in my mind’s eye.

 Kazakhstan is a land of sharp, even stark contrasts. It is a massively large country, virtually the size of Western Europe but with a mere 15 million people. It is a land of towering mountain peaks, rushing rivers and powerful waterfalls, glaciers and alpine pastures. It is a land of the endless steppe with rolling hills and grass pastures stretching as far as the eye can see. It is a land so arid and parched that little living can survive.The contrasts of Kazakhstan are not limited to its dramatically diverse topography. Its population is as diverse as its landscape. more...

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